In early look, slight rise in NE property taxes

If May­or Mi­chael Nut­ter gets what he wants, the city’s tax rate will be 1.25 mills, said Coun­cil­man Bri­an O’Neill.

In the next few days, a week or so at the latest, city homeown­ers will be mailed what the city be­lieves are their prop­er­ties’ “ac­tu­al val­ues.” Homeown­ers can mul­tiply that new as­sess­ment y 0.0125 to fig­ure out what the 2014 tax on a prop­erty will be. At that rate, an own­er whose prop­erty was as­sessed at $100,000 would pay $1,250 in taxes.

If that’s how things shake out, O’Neill said in a Feb. 8 phone in­ter­view, most people in his North­east dis­trict wouldn’t see much of a change in their prop­erty taxes.

In a meet­ing with coun­cil mem­bers last week, O’Neill said, the may­or’s staffers said they’re tar­get­ing a 1.25 mil­lage rate, if the city doesn’t give tax­pay­ers any kind of ex­emp­tions or oth­er re­lief. In last week’s brief­ing, O’Neill said, the val­ues of in­di­vidu­al prop­er­ties wer­en’t dis­cussed, but av­er­ages in neigh­bor­hoods were.

For al­most every­one in the North­east, it looked like homeown­ers would pay slightly more in taxes, he said. In Park­wood, for ex­ample, it looks like taxes would be ba­sic­ally the same, said O’Neill (R-10th dist.)

If an as­sess­ment goes down, he said, it means it pre­vi­ously was over­val­ued.

“Some people will get really big in­creases be­cause they have been un­be­liev­ably un­der­assessed,” he said.

FUR­THER BRIEF­INGS

O’Neill said coun­cil mem­bers will get fur­ther brief­ings this week.

The idea of re­as­sess­ing all prop­er­ties, of­fi­cials have said, is to make taxes fairer. However, if the total value of prop­er­ties in Phil­adelphia goes up, then, by law, the tax rate must come down. Re­as­sess­ments are sup­posed to be “rev­en­ue neut­ral,” mean­ing the city will col­lect the same money after re­as­sess­ment as it did be­fore.

But the tax rate is really not a mat­ter of de­bate, Coun­cil­man Bill Green said Feb. 8.

“The tax rate is for­mu­laic,” he said. “We don’t have to set a rate. It’s auto­mat­ic.”

The coun­cil agreed last year to as­sess­ing city prop­er­ties at their ac­tu­al value, Green said in a phone in­ter­view. The may­or said he doesn’t want any tax in­creases this year, the at-large Demo­crat said, and he wants the 1.25 mills rate to pro­duce the rev­en­ue the city needs to op­er­ate.

Any coun­cil move that would push up the rate or push down the rev­en­ue is likely to be ve­toed. Twelve votes would be needed to over­ride a may­or­al veto.

For ex­ample, giv­ing own­ers who live in their homes $30,000 homestead ex­emp­tions would shave what some in­di­vidu­als would pay, O’Neill told the North­east Times Jan. 2. Prop­erty own­ers would sub­tract that $30,000 from the new as­sess­ments they’ll soon re­ceive and then ap­ply a tax rate.

However, O’Neill and oth­er coun­cil mem­bers have said the ex­emp­tion would force up the tax rate be­cause the city still needs rev­en­ue to pay its bills and its em­ploy­ees. Fur­ther, O’Neill said, some prop­er­ties will have such low val­ues that sub­tract­ing $30,000 from them will mean they’ll gen­er­ate no taxes at all. In that case, he es­tim­ated more than 30,000 prop­er­ties would pro­duce no prop­erty tax rev­en­ues.

Giv­ing a tax-in­crease abate­ment to own­ers whose prop­er­ties have skyrock­eted in value be­cause of gentri­fic­a­tion is an­oth­er meas­ure that would ease the pain for some people, but spread it around to every­body else.

TAXES NOT PAID

How the ad­min­is­tra­tion got to the 1.25 mills is com­plic­ated, Green said, and it in­volves es­tim­at­ing the amount of taxes that won’t be paid.

The may­or “wants a rate that gives him the same amount of money he col­lec­ted last year,” Green said.

The city is owed $518 mil­lion in de­lin­quent taxes, pen­al­ties and fees, Deputy Rev­en­ue Com­mis­sion­er Frank Breslin said in a phone in­ter­view Tues­day. Des­pite a suc­cess­ful tax-am­nesty pro­gram and ag­gress­ive col­lec­tions, that fig­ure has been rising. It was $498 mil­lion in 2008, he said.

The de­lin­quency fig­ure, Breslin said, rep­res­ents what’s called the “act­ive” re­ceiv­ables. Those in­clude $248 mil­lion in real es­tate taxes that have been de­lin­quent 10 years or few­er, and busi­ness and oth­er taxes that have been de­lin­quent six years or few­er.

O’Neill said he can’t seem to have a con­ver­sa­tion about real es­tate taxes in which de­lin­quent taxes don’t come up.

“It just gnaws at people,” he said.

A NEW WEB SITE

Turn­ing the red ink in­to black got fresh at­ten­tion last week. Six fresh­man coun­cil mem­bers — four Demo­crats and two Re­pub­lic­ans —– put up their own Web site to tell the pub­lic they want to hold coun­cil hear­ings on ways to har­vest what’s owed.

“We are call­ing for hear­ings to see how much is really owed and what the city is do­ing to col­lect the back taxes,” Coun­cil­man Mark Squilla (D-1st dist.) stated in a Feb. 8 e-mail to the North­east Times. “The city says it writes off bad debt, but we are not sure of the num­ber. I would guess about $100 mil­lion. We are hop­ing that the hear­ings will provide us with total de­lin­quent tax num­ber for each prop­erty type, how much is writ­ten off and how the city is go­ing to do a bet­ter job of col­lec­tions or hire an out­side agency to do the work.”

Squilla said he ex­pects de­cisions on the hear­ings to be made this week.

Breslin said a cer­tain seg­ment of what is owed is hard to col­lect es­pe­cially if bank­ruptcy is in­volved.

Also, there are homeown­ers in low-in­come hard­ship agree­ments, who he said keep pay­ing but in such small amounts that their tax li­ab­il­it­ies con­tin­ue to rise.

Fur­ther, he said, the Rev­en­ue De­part­ment wants to up­grade its com­puter equip­ment so it can col­lect more money, and wants to en­cour­age people to get cur­rent on busi­ness taxes by re­du­cing some of the high de­lin­quency pen­al­ties. ••